Net Price Calculator Helps Cure the Sticker Shock of Higher Education

When most students start receiving information about the financial costs of a higher education, they are seniors in high school. Up until that point, many are simply told that college is expensive and they should start saving, but that’s about it. Now, a new tool has been designed to help families understand how much a higher education will cost, which allows families to then begin planning on how to pay for it.

This tool is called the Net Price Calculator (NPC) and was created to be in accordance with 2008′s Higher Education Opportunity Act. Under this act, every institute of higher education that allows students to use federal aid to pay for their education must have an NPC on their website so that students can calculate the price of attending that school. Students can put in their own personal data on this NPC and the calculator shows them the net price of attending that school (tuition, room, and board included).

Some hope that the NPC will keep families from getting “sticker shock” when they begin applying for schools. According to the Institute for College Access and Success, 59 percent of students do rule out schools based on the initial price they see and do not apply for this reason alone.

For example, many families do not allow their students to apply for admission at private colleges because the tuition at these schools is usually around $50,000 each year. However, the NPC will allow families to see that if they apply to these schools, they might getfinancial aid which would make the price of attending much more affordable.

According to theCollege Board, the NPC will “allow students to find that some colleges they thought were unaffordable are within their financial reach.”

If you are a student and want to complete the NPC to see how much you can really expect to pay for a higher education at your chosen school, you will need your parents’ most recent tax returns and W-2 statements. The process takes about 15-20 minutes to complete per school.